Board Related Governance & Board Compensation

Find coverage of the latest news and strategies in board related governance, including company risk assessments, clawback policies and other common pay governance policies. Also find the latest on board compensation, including discussions of director pay magnitude and payment mechanisms.

A special Commission on Corporate Governance convened by the New York Stock Exchange published a list of 10 Core Principles of Corporate Governance. We believe the list provides a balanced discussion, and serves as a reminder that corporate governance is a matter of protecting and promoting the corporation’s interests. Read more

The topic of risk has taken center stage this year and, partly in response, new SEC regulations require companies to disclose whether their compensation programs create risks that are “reasonably likely to have a material adverse effect” on the company. As a new requirement this year, there was no precedent on which companies could rely to develop their disclosure. This article captures the risk disclosure practices from recent filings for over 200 companies in the S&P 500. Read more

A host of critical issues and looming legislative and regulatory changes are poised to affect the landscape for the 2009-10 executive compensation season. In an October 2009 webcast, SBCG's Blair Jones and Roger Brossy partnered with Latham & Watkins to address frequently asked questions surrounding corporate governance reforms and the growing influence of proxy advisors, institutional investors and shareholder activists. Read more

Performance-based compensation for a company’s directors can threaten board objectivity and create possible conflicts of interest. Yet with the right measures and goals, a company can avoid sub-optimization and keep directors aligned with shareholder interests. The best solution may lie in significant equity ownership tied to board tenure. Read more

The new governance environment has changed the dynamics between management and compensation committee members. An optimal partnership between these two parties can improve the business impact of a company’s executive compensation program. Such a partnership can also reassure both parties that the program’s objectives and implementation are as unassailable as possible in the eyes of the shareholders and the outside world. In this article, we outline five steps that create an optimum approach to management/committee collaboration. Read more

Establishing principles to address specific pay program amounts and components will help the Board to ensure that decisions regarding director pay are made thoughtfully, holistically, and accurately. Read the entire article (PDF) written by Blair Jones. Read more

Many of the issues related to executive pay today have emerged because of shortfalls with stock options during the 1990s. Companies’ responses to these issues are beginning to set some trends, including the use of alternative LTI vehicles, increased emphasis on ownership guidelines, and changes to option mechanics. Read more